July Jobs Report shows a loss

Friday's July Jobs report from the US Labor Department sent shock waves reverberating across a range of people in government, universities, think tanks, banks and Wall Street with the loss of 23,000 jobs; but, in actuality, as the report stated things “changed little,” from June, but, in and of itself, with standard revisions and no rambunctious hiring, the loss was not a great surprise. It is worth noting that just under 70 percent of businesses responded to the government survey, the highest in more than two years, despite a loss of respondents over the long term, making this report especially significant for evaluation.

Those customary revisions showed April and May down to a cumulative loss of 103,000 bringing the monthly average for this year to 60.000 gains.

For some observers there was hope that with the March and April reports seeming to show a surge in hiring, that July was destined to sustain that growth. Even with that in mind, a review of the recent economic landscape of the US shows sustained blows to not only employment, but the immigration crackdown that deported hundreds of low skilled labor,  the yo-yo tariffs, and the Iranian war - in particular - things could have become much worse.  The current round of talks is not guaranteed to open the Strait of Hormuz freeing the transport of oil and fertilizer, important components of transportation, and production across the world, but especially in the US where gasoline prices, on average, have been as high as $4.69 per gallon of regular gasoline.

The unemployment rate at 4.1 is also little changed, but there is legitimate concern that further employment losses joined with the high rate of inflation and its effect on interest rates can cause headaches from Main Street to Wall Street as hundreds of American working families face not just high grocery and gasoline prices, but expensive costs for housing, whether buying, or renting, especially in urban areas, showing that affordability is not a political buzzword.

“We have a labor market that’s stable but stuck in second gear,” said Lydia Boussour, a senior economist at the consulting firm EY-Parthenon. “We still have an environment where those supply shocks are working their way through the economy, and a lot of uncertainty, and that will keep businesses cautious in hiring,” reported The New York Times.

While companies are not slashing payrolls, the “low hire-low fire” atmosphere cannot remain indefinitely, just as an economy sustained by high income consumers is not viable as it threatens to jettison the middle class.

“This kind of equilibrium can’t hold indefinitely. A market frozen between low hiring and low firing is only stable as long as nothing pushes on it. Should demand soften, the lack of hiring leaves no cushion to reabsorb workers who lose their jobs, and what now reads as a quiet labor market could tip into a rising unemployment rate quickly. The low-hire, low-fire dynamic has been remarkably durable, but durability isn’t permanence. The longer it persists, the more it’s worth watching for the first sign of which direction it finally breaks,” as we reported from the Hiring Lab in May,

One aspect getting a lot of attention in the last few months areHourly wages which “grew 3.5 percent 3.2 percent over the year, the slowest pace since May 2021 and likely less than the rise in prices over the same period,” added the Times.

Current inflation as of this date is 3.5 percent, down from 4.2 in May, according to the US Bureau of Labor Statistics.

The July price index will be released on August 12, and that will be a bellwether for further analysis, and predictions for the American economy.

One move that will please the White House, is the growth in construction, but that is focused, less on residential, but more on the construction of those controversial AI data centers, to the tune of 22,000 jobs; but, even with environmental concerns on water and electricity usage, this horse is out of the barn and is unlikely to return.

“There is no parallel in American history for the boom underway in the construction of data centers, fueled by companies with functionally unlimited cash that are racing to supply skyrocketing demand for their A.I. models, “ reported the Times.

According to Kush Desai, a White House spokesman, who said n a statement, “The Trump industrial resurgence is on schedule,” and is “unleashing more private-sector growth through President Trump’s proven economic agenda of tax cuts, deregulation and energy abundance.”

“It’s a sharp reversal from what we’ve seen in the past,” said Glassdoor chief economist Daniel Zhao. exercising some caution by saying “It’s also coming at a time when there’s an incredible amount of hype in the tech industry around data centers, and it’s just not showing up in the employment numbers.”

Healthcare is still reigning supreme in job growth, and, with our ageing population, is bound to continue; but, in some geographic areas, especially in the South, many of these jobs will suffer a loss with the end of the Temporary Protection Status for Haitians who make up a considerable bulk of health care employees, especially in nursing homes. This may have accounted for a slower growth of 22,000 jobs.

Of equal concern, especially to the Federal Reserve, is the Labor Force Participation rate, for workers between the ages of 25 and 54, and while July gave only a slight increase of 61.4, the employment ratio of 58.9 decreased by 0.4 percentage point. 

June showed a fall of six tenths of a percentage point, for the LFP, the largest “one-month drop in more than 70 years outside of the pandemic,” bringing the total net loss of the LFP to a decline of 0.7 percent since January,

Also falling is the leisure and hospitality industry, as American families, and individuals, face higher inflation, and with weakened wage growth, those dinners out, hotel stays, and bar events are taking a downward trend from a once solid area of growth (it dominated for many months) with a loss of 80,000 jobs, which didn’t get the anticipated World Cup bump.

Threatening to eat further into American pocketbooks are tariffs which have taken a new turn after the US Supreme Court, in February, struck down the tariffs that President Trump had created under the International Emergency Economic Powers Act; and, on July 23 using a broad interpretation of Section 301 the US is adding tariffs “relating to forced labor that covers over 80 trading partners. The Tax Policy Center (TPC) estimates that these finalized provisions will raise $581 billion over 2026-2036 (less than the draft version of the tariff). The rate varies from 10 to 12.5 percent and is applied preferentially for certain trading partners, many of whom have previously signed a trade agreement with the administration.”

Critics have been quick to point out that this is a pretext from the administration to reestablish the tariffs that SCOTUS eliminated,

Earlier in June there was a fresh round of taxes on Canada: three new tariffs for 554 Canadians, “citing Section 338 of the Tariff Act of 1930 for the first time” and covering , , alcohol, dairy and related goods, wood, electronics, furniture and plastics, hockey equipment, among other goods, including clothing, games, and art, all set to begin August 19 unless reduced, or modified through pending negotiations between the two countries.

“Prices for the goods affected by these new tariffs, and others in train, could start rising in the runup to the November 2026 midterm election. Many of the affected goods are currently subject to zero or very low tariffs, under the USMCA, other trade pacts, and the US tariff schedule bound in the World Trade Organization,” reported the Peterson Institute.

American households could in effect face a $920 tax rate per household;and, for the bottom quintile the tax rate will rise by 0.8 percent points, and 0.6 percent for the top quintile according to TPC estimates.

With growing uncertainty about the tariffs urban centers such as Chicago have seen less economic growth than forecasted, due to tariffs and high borrowing costs late last year, and with these new tariffs looming on the horizon its effect on employment is bound to reverberate, as they did in 2025 when Gus Faucher, PNC Chief economist told Crain' Chicago, “There are a lot of interest rate-sensitive industries in Chicago, a lot of internationally focused industries in Chicago. And so tariffs, high interest rates have been more of a drag on Chicago than in the national economy."

Interest rates continue to be a hot topic for observers and at its last meeting the Federal Reserve Open Markets Committee has kept rates the same as it did last month holding them at 3.5 percent to 3.75 percent, but there was dissension with three members saying that borrowing costs should have been raised to ease inflation.

That traditional 2 percent target range for inflation “has overshot that level for half a decade and has moved further away from it over the past year; not only because of the Iran War but also President Trump's tariffs and other factors,” reported the Times.

Price stability is a concern of new Fed chair Kevin Warsh, but so far we have not seen how he will deliver it despite his statements to make price stability the main focus of his tenure.

In July before members of Congress he said,”When prices go up, I know it hits your constituents every day. I'm not trying to sound dismissive of it, but I also don't want to say that there's much that we can do about cattle prices or milk prices today. But there's a lot we can do to make sure that the entire grocery aisle doesn't have higher prices, and that's what we're committed to do.”

One day at a time with June Jobs Report

Thursday’s release of the Jobs Report for June by the US Labor Dept, provided a surprise showing of only 57,000 non-farm jobs giving some observers, including economists, as well as lawmakers, concerns, since 110,000 were predicted; and, with the revisions to April and May, there was increased concern about the overall economy.

While one report is not a predictor, the added complexity has created equal concern for the markets and later actions of the Federal Reserve Bank at its meeting later this month.

Reactions have been mixed: “Overall, this report shows a job market that is a bit shakier than the May data had indicated, but inflation still remains too high,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association, reported The Hill.

Inflation is the boogeyman and at 4.2 percent, it has become a significant factor in how middle and lower income American families feel about the economy, and as we’ve reported the last few months, it is still a K shaped economy, with those at the lowest bar struggling to afford rent and groceries although there is slightly less concern with the lowered gas prices - about 50 cents less - than before the Israeli-American led war against Iran, but with the fragile understanding, and disagreement about progress by Iran, that outlook could change.

Supporting the more positive view of the economy, “The University of Michigan Consumer Sentiment index was revised higher to 49.5 in June 2026, up from a preliminary reading of 48.9, although it remained slightly below forecasts of 50,” but Surveys of Consumers Director Joanne Hsu reported that, “. . .  sentiment remains in unfavorable territory at 13% below the February 2026 reading prior to the start of the Iran conflict, and nearly 20% less than a year ago. The cost of living remains at the forefront of consumers’ minds; for the third straight month, over half of consumers spontaneously mentioned that high prices are weighing down their personal finances.”

Wages are now at a 0.3 percent increase of 13 cents totaling $37.64 but it’s not enough to keep up with the rate of inflation, “Over the year, average hourly earnings have increased by 3.5 percent. In June,average hourly earnings of private-sector production and nonsupervisory employees rose by 7 cents, or 0.2 percent, to $32.38,” BLS noted.

Of equal concern is the labor participation rate that sank to 0.3 percent, 61.5 percent, a figure closely watched by the Feds, and of concern for economists as it takes course among the financial markets as a bellwether of its confidence.

"June job gains slowed but did not collapse and unemployment edged lower for the wrong reason. That doesn’t do much to reassure new grads but job gains are still well above last year -- the threshold is low and wages have gotten sticky. Those gains are reinforcing the floor under service inflation, which will further agitate hawks at the Fed. Financial market hopes that the Fed will not hike in response to the report are misplaced -- we still expect two hikes by year end. July was not an active meeting for a rate hike in our forecast,” said Diane Swonk, chief economist at KPMG U.S to Investing.com.

Adding to the plurality of opinions is Mohamed El-Erian, former CEO of PIMCO who added that,"Combining (the nonfarm payrolls and unemployment rate) with other data in the report -- including a dip in labor force participation to 61.5% and 3.5% earnings growth -- suggests that the supply-side of the labor force was the primary driver for the miss in job creation. As to implications for Fed policy, this should dampen market expectations for a rate hike this year -- a scenario I have argued was a misreading of the Fed’s likely stance."

“It can be simultaneously true that employers are adding jobs amid a fairly stable labor market and you are having trouble finding work,” explained Elizabeth Renter, senior economist at NerdWallet.

“Paired with the very real affordability constraints brought on by inflation and right now could be a painful time for the 7 million people who are out of work.”

While statistics might be seen as less of a concern outside the statistical stratosphere of the BLS, the 4.2 unemployment rate belies many other worries, but there is hope among others, and “Gregory Daco, the chief economist at EY, a consulting firm, said he anticipates job growth will stabilize at approximately 70,000 per month for the rest of the year, and the unemployment rate may edge up, but only slightly,” according to The New York Times.

Add to the picture, one of caution, with most people staying in their jobs, rather than seeking out a new one for fear of failing to find another.

The White House must be watching all of this with cautious optimism considering the low polls of President Trump’s handling of the economy, a June 2026 NPR/PBS News/Marist Poll, said only 33% of Americans approved of how Trump is handling the economy, his lowest-ever economic approval rating on the issue since Marist began asking the question in 2019; yet ,“Kush Desai, a White House spokesman, said the jobs report “reinforces that the American labor market remains solid thanks to President Trump’s economic agenda. In his post on social media, he called particular attention to the slight uptick in manufacturing jobs last month.”

A look at the prime age employment (ages 25 to 54) ratio of 80.2 for June is especially troublesome, and along with their LFP loss of 83.3 that falling rate combined with the overall rate of 0.6 percentage points, seems as if might be an outlier, “the biggest one-month drop since 2009, outside the pandemic plunge. The number comes from the survey of households, which is more volatile than the business survey, and it’s possible (even likely) that the figure was a fluke and will reverse next month. But it’s a very odd reading, especially after a period of remarkable stability in the measure,” opined The Times.

“The leading reasons why prime-age adults (ages 25–54) are not in the labor force are care-giving responsibilities and personal health issues or disabilities. According to data from the U.S. Census Bureau's Current Population Survey (CPS) and independent polling, these two factors account for nearly 72% of the reasons why prime-age adults opt out of looking for work,”

Child care, especially compared with other countries, where subsidies are often the norm, combined with the high cost of American healthcare are credible reasons and with recent changes to coverage for many people, a choice between trying to work but finding less opportunities and with most employed people staying put, it’s easy to see, that for some, especially with a wage earning spouse, or partner, might result in this change of 720,000 people leaving the workforce.

While leisure and hospitality took a hit, not getting the expected World Cup bump, professional and business services gained, and in areas where AI was expected to decimate, it did not occur. That increase of 36,000 might not be a predictor, but it shows that the AI degeneration that many have feared is not here yet.

Health care increased at 22,000, although at a slower pace than seen before the previous 12 months at 38,000.

Again, one report is not a predictor, but the analysis of the June report along with the revision of March to 129,000 from 172,000 and April from 176,000 to 143,000, even accepting revisions as standard procedure is giving some economists pause, but especially with that drop in labor participation, from the household survey which gives a more accurate portrayal of American jobs than the business survey, the next quarter will bear watching.

Fed keeps rates the same because of rising inflation

On Wednesday the Federal Open Market Committee of the Federal Reserve released an unexpected announcement that US interest rates would remain in the same target range, between 3.50 and 3.75 percent, a move that reflects the high rate of inflation, 4.2 percent -  the highest rate since April of 2023. Add to that the recent May jobs report of 172,000 jobs, the die was cast for stasis.

"Inflation remains elevated relative to the Committee's 2% goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy," the FOMC said.

Significantly, this was also the first report under the new Fed Chair, Kevin Warsh, who was nominated by President Trump as a direct move to cut interest rates, (which the former chair Jerome Powell refused to do using standard macroeconomic metrics), so Wednesday also brought a closer look at Warsh, who has changed both the tone of his post meeting remarks; and, has diluted the predictive “dot plot” which previously has shown possible future Fed actions: but that’s not all, Warsh also has created several task force committees that seem a generation away from his baby boomer predecessor.

Another significant change was that there was almost near unanimous support for the stasis, and even with some members diverging in how much of an increase, it reflects a recognition of the economic reality of the world’s largest economy, and its reaction to what, and how the Fed manages their dual mandate of full employment and inflation at 2 percent, a standard that Warsh seems to have drifted away from in his later remarks.

Of course, the elephant in the room is the Memorandum of Understanding between the US and Iran to end the war that has affected, or sustained the costs of energy prices. With that in mind, Monday’s news that Iran would open the Strait of Hormuz has eased the price of regular gasoline prices down by 50 cents per gallon, but still a dollar higher than it was before the war began in February. 

Trump was under a great deal of pressure to get the Strait open before energy prices rose even further, and to calm the stock markets, at least for the time being; with critics noting that Iran has a powerful tool in the future, should there be greater pressure from the US or Israel. But, for the time being it seems to be smooth sailing.

Setting sail in a new direction is Warsh, and CBS News reported that, “The so-called easing bias — a sentence in recent FOMC policy statements signaling the central bank was leaning toward cutting interest rates — was removed from the June guidance, which was significantly slimmer than the typical statement.” 

"You might have already noticed something, a difference in today's policy statement," Federal Reserve Chairman Kevin Warsh said in a press conference to discuss the Fed's latest interest rate decision. "It's a bit shorter, a bit simpler and it dispenses with some older language. That statement just gives you the facts as best we can judge it."

This will be a closely watched feature at future meetings and also under examination are “what economists expect to be a major shift in the Fed's communication practices, including the aforementioned circumspect policy statements and lesser forward guidance. 

That said, the new task forces are causing scrutiny to review how it handles or assesses “issues ranging from communications to inflation data,” but some analysts and economists are wondering what exactly those words will mean in the future and if there is a political message emanating from the White House.

It may be too early to tell, but with as with all current political events, and remarks, hinging on the November midterms for Republicans to keep their majority, we have this from Warsh: "If I saw somebody in the grocery store, what I would say to them is that we cannot have a very significant effect on particular prices, the price of oil in the markets today, or even the price of a dozen eggs," and Warsh continued."But it's to make sure that those changes in oil or beef or eggs or milk don't broaden in the economy, don't have second and third effects,” adding that, "We're going to deliver on it."

If Warsh is going to work with the White House, as expected, then that will be a tough slog with nearly 80 percent of Americans disapproving of Trump’s handling of the economy.

Returning to that statement, without uncertainty, or even affordability, the stated goals for these task forces are “addressing the Fed’s communications, its balance sheet, its reliance on data sources, productivity and jobs, and the central bank’s inflation “frameworks.” 

As anyone who follows Washington knows, the creation of white papers, task forces, and committees can be a place where legislation goes to die, so observers are wondering what will be the result of these goals.

Speculation is often the bulwark of Washington, and with the possibility of the evaporating “dot plots”, it runs rampant, so we have this from The New York Times:

“The dot plot had fewer entries than usual. Mr. Warsh confirmed he was the only official who did not submit any projections, while another policymaker opted against submitting projections just for 2028. Mr. Warsh has argued that Fed officials should speak less frequently and forgo providing specific guidance about where rates may be headed in the near term to avoid limiting their ability to pivot if the economic backdrop changes.”

An analysis of the possible meanings of this are wondering if this is a case of being quiet and carrying a big stick? Is the stick coming from the White House?

 

In one of his atypical comments the president did say, in contrast to an earlier Oval Office statement when the new inflation report was released, "I love it. The numbers were great. You know what I really love? I love the inflation," but when asked about the Fed’s decision to maintain interest rates, President Trump told reporters, “It’s alright, whatever.”

“Trump later expounded a bit more, when queried about the prospect of a rate hike soon. “It could happen. It’s hard to believe. It just keeps our country down. It’s so unusual.”

“But in a sign of a changed tone on the part of the president, he then said this of Warsh: “We have a very good guy over there now, so I’m guided by what he wants to do.”

The Times did expand on what an interpretation might be noting, “Rising inflation and a steady policy rate translate to a lower inflation-adjusted or “real” interest rate, meaning the Fed is not restraining the economy as much as it once was. That risks making the Fed’s inflation problem even worse, especially at a time when the labor market has strengthened and the economy more broadly is holding up well.”

With several factors looming on the horizon, ending a war, rising inflation, a resilient American jobs market and political maelstroms, plus a central bank possibly beholden to the executive, it’s a very long road ahead for price control, and even harder for working American families.

Boom or bust for May Jobs report?

There was an old chewing gum commercial in the 1960s with the jingle of “double your pleasure double your fun.” and that seems to apply to the May jobs report released on Friday by the US Labor Department showing a gain of 172,000 non-farm jobs, a figure that was nearly double what economists had predicted, and giving once more, the label of resilience of American labor.

One aspect that gave a welcome tweak to the good news was that there was a broad inroad to jobs beyond health care that extended to both manufacturing and local government employment. But, while this was welcome news, another aspect was that people were staying on the unemployment line longer, and while new jobless claims had not statistically increased, those sitting on the bench have been a cause of concern for the future.

“The share of unemployed workers who have been out of work for 27 weeks or more rose to 27.5% in May, up from 20.4% a year ago and well-above pre-pandemic norms. The situation for many unemployed job seekers is grim, even in the midst of impressive monthly job gains,” said the Hiring Lab in its assessment of the May report.

It’s still a low fire, low hire environment, but with one fell swoop of the cards from further inflation, now at 3.8 percent, the scales could easily tip into recession; and, coupled with the uncertain outcome of the US-Israel war against Iran the effects on the national economy, and jobs could prove precarious.

Turning again to the Hiring Lab they offered this cautionary note:

“This kind of equilibrium can’t hold indefinitely. A market frozen between low hiring and low firing is only stable as long as nothing pushes on it. Should demand soften, the lack of hiring leaves no cushion to reabsorb workers who lose their jobs, and what now reads as a quiet labor market could tip into a rising unemployment rate quickly. The low-hire, low-fire dynamic has been remarkably durable, but durability isn’t permanence. The longer it persists, the more it’s worth watching for the first sign of which direction it finally breaks.”

When the Federal Open Markets Committee meets later this month it will be the first test of the new Federal Reserve Chair, Kevin Warsh to see if he bends to the will of President Trump who wants rate cuts, or will he according to the standards of macro economics increase rates in light of these job numbers, especially considering the revisions to the April report. 

“If Chair Warsh pushes for cuts at his first meeting, he will be pushing against the evidence,” said Seema Shah, chief global strategist at Principal Asset Management.

We still are seeing a mixed bag in the report not only with these concerns but also with wages that have seen a rise but much of that increase will be spent by working families on the increasing higher costs of housing, groceries, and of course, gasoline which has, on the average, since the beginning of the war in February increased to $1.25 per gallon.

Economists are worried about “the 55% rise in the price of diesel fuel, which is used in shipping, farming, transportation and construction. It can quickly raise costs for consumers as the higher price is passed down across a number of industries.”

The cost of diesel fuel which as the New York Times reported in late March, is less discernible to the average consumer but whose price has climbed faster than the price of gasoline with the war, which could lead “to inflation across a wide range of goods” affecting the price and shipping of those products that most Americans rely on.

“Diesel powers a lot of basic industries,” said Vidya Mani, a visiting associate professor at Cornell University’s business school whose research focuses on supply chains. “Mining industries, chemical factories, clothing factories — a lot of those things come from diesel.”

“Because of its far-reaching consequences, it can stop a lot of industries,” she said, adding that if prices continue to rise, consumers will probably begin to see the effects on everyday items and necessities within the next several weeks.”

“Much of the diesel in the United States comes from domestic supplies. But oil companies can still price the commodity at global market rates. In January, a little more than 40 percent of the cost of diesel came from the price of crude oil, according to the Energy Information Administration” making things even murkier for consumers as time goes by without an end to the conflict.

Meanwhile, the unemployment rate remains at 4,3 percent, but, as we've stated before, this is only a snapshot in time, and other factors must be taken into consideration: as NBC News reported, “Average hourly earnings rose 3.4% from a year ago. According to Jennifer Timmerman, an analyst at the Wells Fargo Investment Institute, that’s the lowest since 2021. In April, inflation sharply jumped to a 3.8%, its highest level in three years, due to the surging price of gasoline and the resulting economic ripple effect.”

Another worrisome statistic is that “Wholesale inflation — what businesses pay other businesses for goods and services — surged to 6% in April, according to BLS data released May 13. That was sharply higher than the 4.3% in March,” they added.

In a later report, at the middle of June, BLS reported that the Consumer Price Index rose 0.5 in May, putting the annual inflation rate at 4.2 percent over the last twelve months with energy prices over 7 percent  with the jump in  gasoline paces. The Core CPI, which excludes the volatile food and energy prices rose to  0,2 percent, and on an annual basis to 2.9 percent, creating further economic dilemma to American working families.

Wage growth slowed to 3.5 percent in May compared to April which showed 3.6 percent and that is a figure worth watching. And it’s common knowledge that a dollar doesn't buy what it used to factor in the Trump tariffs and the price of beef, especially ground beef, a staple of the American diet, shows increased prices, just in time for backyard barbecues, a warm weather staple for entertaining. Add to that the morning dose of java, those coffee tariffs are not helping with the daily grind.

For those that follow the market, “After the report, U.S. government bond yields surged and stocks sold off. Fed rate futures also quickly indicated that traders are now projecting a more than 60% chance of a rate hike in October and a more than 98% chance by December’s Fed meeting.”

Waiting may not be an option, said Beth Hammack, president of the Federal Reserve Bank of Cleveland, said on Tuesday, preceding Friday’s report,”“If we wait for definitive evidence that high inflation has become embedded in the economy, it may require larger policy adjustments, at greater cost."

The White House was overjoyed with the report, especially considering the sinking polls for Trump and his handling of the economy, and “I think that basically what we’re seeing is an enormous amount of positive momentum in hiring,” Kevin Hassett, the director of the National Economic Council, said on CNBC Friday morning.

Asked about wage growth tracking below inflation, Hassett deflected concerns on Bloomberg Television, saying that “real wages are going up on average about $3,000 since President Trump took office.”

Once again, driving labor gains over the last year was education and healthcare some of the largest contributors to job growth in May but there were surprises as well, with an unexpected gain of 70,000 jobs in leisure and hospitality, “well above the average monthly gain of 14,000 over the prior 12 months,” BLS said.

NBC reported that PNC Bank chief economist Gus Faucher noted that “the breadth of job growth has picked up in 2026.” He added that “in 2025 there were net job losses in all industries outside of healthcare, but in 2026 those industries are seeing net job growth.”

Local governments also saw job gains but in the last several months there has been a total loss of 350,000 federal jobs and many former workers are gravitating to take their experience to local governments.

One possible theory, and it’s purely speculative, is from The New York Times noted is that “construction, which has been trending up since last fall amid a massive buildup in data centers to serve the A.I. boom. Adam Schickling, an economist with Vanguard, thinks the unseasonably warm spring may have also played a role jump-starting hiring in fields dependent on weather changes.” and he added, “That is essentially something you ultimately pay back in one form or another. You’re hiring people earlier, so then you’re not hiring that person later,” he said. “I think it’s still really early to suggest that there’s a reacceleration in the labor market.”

Slowing to a crawl are financial services, including information technology to 22,000 jobs, “and the transportation/warehousing industry. That sector is “down by 92,000 [jobs] since reaching a peak in February 2025,” the agency said.”

One particular aspect that represents another cautionary note is that, as Axios reported,  “The economy has averaged gains of 114,000 jobs per month so far this year, a far cry from the 10,000 monthly average added in 2025.”

May did give some blockbusting numbers, but it’s a party that might have an end in a few months. With inflation, both consumer and wholesale, against a background of uncertainty with the US and Israel war, and as a result, with climbing fuel costs, and a host of other related factors, plus  lowered wages, the American economy gets, in our estimate, a B minus.

On Monday June 15 the Trump administration announced a memorandum of understanding with Iran towards a cease fire of 60 days and an end of week opening of the Strait of Hormuz, but international observers and economists are leery of the announcement, noting that Israel has not agreed to the deal, and that even if the Strait does reopen it will take months for price regulation to presume pre war price controls due to severe disruption of the international supply chain.

Updated 16 June 2026

April Jobs Report: Resilient for now

In one of those economic surprises, or the ever circuitous path that the American economy has taken in recent years, on Friday the US Dept of Labor released its monthly job data for April revealing 115,000 non-farm jobs, much to the surprise of economists who expected at least half of that figure showing that the American jobs picture is still resilient. And, if that seems to be a hackneyed label, then so be it say a range of not only economists, but academics, market watchers, and others.

CNBC in its coverage said, “The report shows the labor market has been “pretty much stable for a year, year and a half,” Austan Goolsbee, president of the Federal Reserve of Chicago, said in a CNBC interview. “I characterize that we’ve been stable without being good. ... The unemployment rate has been stable, the hiring rate’s been stable, the layoff rate’s been stable, the vacancy rate has been stable. So, I still think there’s not a lot of evidence that the job market is falling apart.”

While it cheered the White House and other administration officials, to others it still seemed to be a cautious praise at best, with higher than sough inflation, and the effects that the War on Iran, and the closing of the Strait of Hormuz which has hampered the delivery of 20 percent of the world’s oil and natural gas resulting in an average per gallon price of gasoline at $4.59 per gallon in the United States.

During his State of the Union address, President Trump declared that America under his leadership was “bigger, better, richer, and stronger” and created a “booming economy” now words that he may regret saying, especially with his polls tanking, those efforts will undoubtedly be on the way. 

The Associated Press-NORC-Center for Public Affairs recently reported that his support in the GOP fell from 74 percent to 62 percent in April, a stark figure among his base of support. Adding to that, 61 percent of Americans do not support the US in its war against Iran. A devolution in his handling of the economy is not far behind, especially with 80 percent of Americans feeling the price squeeze at the gas pump.

While wages increased to 3.6 percent, Americans are now forced to spend much of that increase on gasoline, especially those people who live in areas where public transportation is scarce; and, add to that the spectre of even higher food costs due to increased transportation costs, then the results for many Americans  may be burdensome, especially lower income individuals and families as they struggle to meet higher housing costs in a country that has not created enough of them.

Of equal concern is that job increases may not meet population growth as we reported in April, and where some demographers have said the nation has fallen behind, 

While the unemployment rate is 4.3 percent it could have been higher had not some people simply given up looking for work in a challenging environment, especially for those without college degrees.

A conundrum is that consumers are still spending, and while they are the economic drivers of the national economy the reasons for their continuance bear examining; or,one case, higher than average tax returns are one cause, interest rate cuts by the Fed last year are another, and, lastly, is that high income earners are still spending, it supports the often quoted K shaped economy. But economists say that might not last forever, and if consumers continue to cut back on spending to afford fuel, the consequences, according to Investopedia, would cause “a ripple effect  that hurts the job market. Some forecasters unemployment to rise as soon as this summer.”

Overall, this is an economy that has its visible markers, as well as its less visible ones, notably that job creation has consistently been higher in the small business community, commonly referred by some as the “Mom and Pop” market, where recent analysis has shown that  for companies with less than 20 employees they have created more than 525,000 jobs in 2025; and in January through March 169,000 jobs, a figure greater than by larger employers.

The recent back and forth on a resolution to end the conflict in Iran has caused the markets to go from high to low, often in less than 24 hours; a figure that some observers are attributing to President Trump’s vacillating remarks that the war is over, and there is another resolution pending, but then, also saying that there is no Iranian leadership to negotiate with; all of which has made the market indices seasick trying to keep up.

One prominent feature of the last several months of job reports is the dominance of health care related jobs, attributable to the aging of America, and the needs of the so called “baby boomers” whose longevity requires consistent care. As has been noted, economic observers are wondering of the precariousness of the jobs outlook where one industry dominates all the others. For April this dominance resulted in a gain of 37,000 jobs.

Likewise social assistance of 17,000 jobs gained and attendant home health care of 11,000. Common knowledge dictates this as a historical legacy but its dominance could cut into future gains, or losses for other industries.

On the down side is the continuing loss of federal workers, begun last year at the beginning of the second Trump administration, now with 9,000 additional jobs cut.

On the corporate side, cuts have been rampant lately with those at META, and now the bankrupt Spirit Airlines.

The news that Meta plans to cut approximately 10% of its workforce—roughly 8,000 employees—starting May 20, 2026, “alongside 6,000 open role closures to fund massive AI investments” according to the New York Times CEO Mark Zuckerberg, who deemed 2026 "the year that AI starts to dramatically change the way that we work," expects to offset high infrastructure investment costs while driving efficiencies.

“Mark Zuckerberg, Meta’s chief executive, has said he expects much of the work done in the technology industry to eventually be overtaken by A.I.-powered systems, including coding assistants that help engineers write software.”

“We’re doing this as part of our continued effort to run the company more efficiently and to allow us to offset the other investments we’re making,” Janelle Gale, Meta’s chief people officer, said in the memo to employees. “This is not an easy trade-off and it will mean letting go of people who have made meaningful contributions to Meta during their time here.”

Tech and other informational services have been on the downswing for some time and the April report shows this is a continuing trend with a loss of 13,000, and telecommunications another 3,000.

While the effects of the two months of war with Iran has only slightly affected the US, despite the higher gas prices, the resulting effect on the global economy has been harsh: “The fallout from two months of war in Iran is shuttering textile mills in India and Bangladesh, grounding airplanes in Ireland, Poland and Germany, and prompting energy rationing in Vietnam, South Korea and Thailand. The only country, it seems, that has been relatively spared from the economic chaos is the one that started the war: the United States,” also reported by The New York Times.

“While warning signs of a recession are flashing across countries in Asia and Europe, the United States is likely to outperform most of the world’s advanced economies. Growth is steady and unemployment low. “It’s still hard to bet against the U.S. economy,” the Royal Bank of Canada said last week.”

If the aggression lasts much longer then the effect on US jobs market will increase, despite the repeal of most of the Trump tariffs from the recent decision from the US Supreme Court; but, with recent threats on Spain for not supporting the administration's efforts to open the Strait, an area freight with danger, tariffs will once more be a factor facing American companies, and in turn consumers.

“Economists say it would take a much more significant spike in oil prices, perhaps as high as $150 a barrel, for them to begin worrying seriously about the possibility of a recession in the United States.

That is not the case elsewhere, where the dreaded combination of slower growth and higher inflation is already raising alarms about stagflation.”

Are we safe? Maybe, say some, again from the Times: “For the United States, the biggest advantage is that, unlike most of its global peers, it produces more oil and gas than it consumes. That doesn’t mean it is unaffected by what happens in global energy markets, but it helps dampen the impact.”

Most importantly, “The U.S. economy is also heavily based on services and depends relatively little on the energy-intensive manufacturing industries that have been hit hardest by the spike in oil prices. And it went into the war with a stronger economy than many other countries, giving it more of a buffer against a slowdown.

“We’re not feeling the same pain the rest of the world is,” said Jason Bordoff, the founding director of the Center on Global Energy Policy at Columbia University.

Others are not so sanguine citing the cost of diesel fuel which as the Times also noted, in late March, is less discernible to the average consumer but whose price has climbed faster than the price of gasoline which could lead “to inflation across a wide range of goods” affecting the price and shipping of those products that most Americans rely on.

“Diesel “powers a lot of basic industries,” said Vidya Mani, a visiting associate professor at Cornell University’s business school whose research focuses on supply chains. “Mining industries, chemical factories, clothing factories — a lot of those things come from diesel.”

“Because of its far-reaching consequences, it can stop a lot of industries,” she said, adding that if prices continue to rise, consumers will probably begin to see the effects on everyday items and necessities within the next several weeks.”

“Much of the diesel in the United States comes from domestic supplies. But oil companies can still price the commodity at global market rates. In January, a little more than 40 percent of the cost of diesel came from the price of crude oil, according to the Energy Information Administration” making things even murkier for consumers as time goes by without an end to the conflict.

Spirit Airlines shut down last  Saturday “after failing to strike a deal for a financial lifeline from the Trump administration, two people familiar with the matter said,” according to The New York Times.

For air travelers, looking for a no frills trip with low ticket costs, they had it but also faced charges for nearly everything to balance the fares, they succumbed to “high fuel prices, competition from larger airlines, the Covid-19 pandemic and an engine defect hobbled the company.

In recent weeks, “the airline had been negotiating a $500 million lifeline from the Trump administration. Some of the investors that Spirit owed money to oppose the terms of the bailout, under which the government could have ended up owning 90 percent of Spirit, because it would have left them in a worse financial position if the airline eventually failed.”

4,000 employees in Florida alone are now without jobs, with almost 1,000 employees laid off from Dallas-Fort Worth and Houston airports, plus more in Detroit, with rough estimates of a total of 17,000 ending an era, but also a model that was not working in post pandemic America. 

“Spirit has been widely credited with democratizing air travel in the United States by keeping costs and ticket prices very low. The approach served Spirit well for years, generating huge profits. But competition from larger airlines and rising costs, particularly for pilots and other professionals, hobbled the company after the pandemic. It also suffered disproportionately from industry wide engine problems,” noted the Times.

Meanwhile that old bugaboo, inflation - is still a large concern as has been widely noted, and the Federal Reserve Bank has kept interest rates the same in light of the 3.8 inflation rate, much higher than its 2 percent target, 

While Jerome Powell’s term as head, ends in a few days, the nominee by the president, Kevin Warsh is expected to have Senate approval, and is expected to cut interest rates, since while “the Fed cut rates last year, it did not deliver the kind of relief that Mr. Trump wanted. Since January, it has also turned cautious on subsequent reductions, a sentiment that has only grown amid the war in Iran, which has caused an acute energy shock,” said the Times.

It’s no secret that Trump wants stronger cuts and is determined to influence the Fed from the White House, threatening its traditional independence hinged by mandates on low inflation and job stability, which was threatened by the false charges of cost overruns attributed to Powell at the headquarters building.

Warsh has said if approved there is the chance that he would do so, besides his statement that he would not be the president’s “sock puppet”. Critics and Capitol Hill observers worry that should be stray from the president’s wishes this could be a repeat scenario “according to Peter Conti-Brown, an expert on Fed governance at the University of Pennsylvania, said Mr. Powell’s insistence on a clear, certain end to the investigation was about “not just about protecting himself but about protecting the Federal Reserve.”

“If this becomes a tried-and-true path to bully a central banker out of office, then we will see its invocation again,” said Mr. Conti-Brown, who added that the investigation had already proved damaging in other ways.”

March Jobs Report: Optimism or despair?

Now that the Passover and Easter holidays are over, it’s time to take a closer look at the March jobs report and its surprising report from the US Dept of labor that showed 178,000 non-farm jobs, a figure that far exceeded expectations, and predictions marry that to the previous month’s heavy hitters of health care, as well as a decrease in the unemployment rate to 4.3 percent, it seems that there might have been a rebound from earlier worrisome reports, yet a closer look under the hood shows a different view.

One of the chief concerns is the lowered rate of job participation, and while the BLS deems it negligible,  - 61.9 % - but economists are watching the figure and see that the downward trend is concerning, the less people working, or giving up looking the less the match to population growth and the formula that economists examine to determine the health of the US economy.

“The unemployment rate dropped, but for the wrong reasons: a loss in labor force participation,” Diane Swonk, chief economist at KPMG told Fortune. The declines were concentrated among prime working-age men (twenties to thirties); young women between ages 20 and 24; and men over 55. In other words, the unemployment rate fell not because people found work, but because they became discouraged and stopped looking.”

Add to that the deportation of undocumented workers by the Trump administration and the uncertainty regarding judicial oversight, things don’t seem as rosy as they seem, But, a single report does not hold significance for macro economists, since there is the rule of three reports to accurately predict future concerns.

And, as is BLS custom, all reports are subject to revision as we saw with February that gave a few concerns with its decrease of 133,000, among economists, as well as lawmakers.

One surprise was that construction added 26,000 people to their payrolls and while much of this gain was due to project specific contracts, it is still far less than it has been in the past.

Much of this increase has been attributed to the policies of President Trump, and campaign promises, but this is unclear as of this date.

Federal employment has continued its downward spiral after the DOGE decimation of last year, now down to 355,000 or 11.8 percent, yet there are unverified reports that there are efforts to increase hiring.

Taken together with the threats of AI in the workforce, especially for some programmers, that is a matter of controversy with wildly fluctuating reports varying from total elimination of some jobs, entry-level and white-collar, to the retraining of others.

Forbes noted that, “The pressing question is, ‘You’re going to have a technological shock — how painful is it going to be?” Martha Gimbel, the executive director of the Budget Lab at Yale University, told the [New York] Times."

“At this point, no one knows. Maybe it will be far less than some of the high estimates thrown about. What investors, workers, and the country at large have to realize is there is a risk of unknown size that could further undermine the labor market, also known as the ability of people to make money and live.”

There are a few groups of workers that are vulnerable in today’s job climate: younger workers, those under 25 years of age, especially recent college graduates, and Black and Asian workers.

Taking a rear view look at the beginning of the year, “Through February, employers announced 156,742 job cuts, the lowest January-to-February total since 2022, when 34,309 cuts were recorded in the first two months of the year. It is the fifth-highest January-February total since 2009.”

“February’s dip is a nice reprieve from the elevated job cut plans to start the year. With U.S. involvement in a growing war in Iran, the end of Q1 may bring more layoff plans as companies tighten belts amid uncertainty and higher costs,” said Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas,” in their statements posted on their website.

In a forecast for the future, based on their prior analysis, “Hiring plans rose 140% in February to 12,755 from 5,306 in January. They are down 63% from the 34,580 hiring plans in February 2025. So far this year, employers have announced plans to hire 18,061, down 56% from 40,669 new hires during the same period in 2025.”

Wages increased by 0.2 percent after reaching 0.4 percent in February, and further decreases with higher inflation dependending on the continuing war in the Middle East could cause American consumers to cut back on their spending and with further layoffs, earnings of Big Tech firms, reportedly 32 percent of the S&P 500’s value would sink pulling downwards at the top of the K, according to Dario Perkins, an economist a consultant at TS Lombard, reported This Week.

Taking an even broader look we are still seeing the K shaped economy that we noted last month, the “golden age” that Trump says Americans are living in, most industries are in a hiring freeze inflation is still at 2 percent, and with the richest 1 percent holding nearly 32 percent of the nation’s wealth as they also reported, the future for America’s working families remains uncertain.

With income equality still a present reality there is speculation as to whether it will last or not, but Mark Zandi chief economist at Moody’s Analytics, said to them “This is not a cyclical or temporary phenomenon, he said, noting that it’s “structural.”

Of course, the Israeli-American war and the loss of access to the Strait of Hormuz has increased the cost of gasoline to over $4.00 a gallon and in some stations in Chicago we have seen prices of regular gasoline as high as $4.59 a gallon. Consumers, especially those with children will be hard pressed to balance the family budget with increasing rents, a shortage of affordable housing, and  the higher cost of food, already seen in some areas.

Of note, “This is not the kind of oil shock economists typically look through. Those tend to hit both sides of the equation at once, slowing growth while raising prices, and eventually wash out. This one “is more COVID-esque,” Swonk said, pointing to supply-chain disruptions that extend far beyond crude—from diesel and jet fuel to helium, a key input in semiconductor production. Swonk said CFOs she has spoken with are watching shipping costs soar after the transportation sector had just begun recovering from a recession.”

Recently released figures from the BLS on the Consumer Price Index show that "In March, the Consumer Price Index for All Urban Consumers rose 0.9 percent, seasonally adjusted, and rose 3.3 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy increased 0.2 percent in March (SA); up 2.6 percent over the year (NSA)."

Add that to the cost of producing crops and the increasingly high costs of fertilizer, {the  US is the world’s highest consumer},not to mention the cost of transporting food, the golden age looks deeply tarnished, and despite the repeal of some tariffs by the US Supreme Court, some farmers are still reeling from the president’s tariffs, specifically those that were not able to make purchases before the tariffs hit. To make matters worse, agricultural economists are predicting a 40 percent increase in the cost of fertilizer creating possible food shortages in American supermarkets.

Taking the long view of the March numbers is Federal Reserve Chair Jerome Powell who said, “You can have a series of these supply shocks and that can lead the public generally — businesses, price setters, households — to start expecting higher inflation over time. Why wouldn’t they?” Jerome H. Powell, the Fed chair, said at an event this week” reported The New York Times.

Despite this risk, Mr. Powell did not convey any immediate urgency to take action, saying instead that the Fed’s policy was “in a good place for us to wait and see how that turns out.”

Updated April 12, 2026